Was the Department of Justice firearm-record fee part of a gun dealer's taxable gross receipts?

Plain-English summary

The 1982 memorandum addressed a $2.25 Department of Justice fee for processing a Dealer's Record of Sale of Revolver or Pistol. At that time the fee was imposed directly on licensed firearm dealers, and a dealer that chose to pass it to a customer had to include it in taxable gross receipts.

The official PDF incorporates a later correction: for transactions on and after January 1, 1999, the fee was imposed on the purchaser rather than on a retailer passing through its own cost. The corrected annotation therefore excluded that purchaser-imposed amount from the dealer's taxable gross receipts.

Source-history note

The original memorandum is dated August 30, 1982. Its appended correction is dated June 4, 1999 and controls the later treatment stated on this page.

Citations and references

• California Penal Code section 12076 (as cited)
• July 1, 1982 Department of Justice letter to all Licensed Firearm Dealers about the new DROS processing fee — letter and attachments not reproduced in the official PDF
• August 4, 1982 Principal Tax Auditor memorandum to Gary Jugum asking whether the fee entered dealer gross receipts — memorandum and attachments, if any, not reproduced in the official PDF
• DROS forms, licensed-dealer transmissions to the Department of Justice, $2.25 payments, and optional customer pass-throughs beginning July 1, 1982 — forms, dealer records, customer invoices, DOJ billings, returns, and accounting records not reproduced in the official PDF
• August 30, 1982 Legal memorandum copied to the Compliance Planning Unit, Gary Jugum, and Donald Hennessy — no audit, assessment, refund claim, agency adoption, appeal, or transaction outcome supplied
• Appended DHL correction dated June 4, 1999 stating that on and after January 1, 1999 the fee was imposed on the purchaser and was not part of retailer gross receipts — supporting amendment, statute version, fee schedule, analysis, and correction memorandum not supplied
• Official Annotation 295.1243's section 12076, dealer-incidence, optional pass-through, taxable-gross-receipts conclusion, August 30, 1982 date, literal (Am. 99-2) marker, and note shifting incidence on January 1, 1999 — annotation omits the $2.25 amount and July 1 effective date, DOJ letter, August 4 memorandum, copied staff, June 4 correction date and author initials, supporting 1999 authority, underlying records, later outcome, and reliance status and supplies no additional proceeding record

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/295-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/295-1243.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Mr. D. F. Brady
Principal Tax Auditor

From:

Mary C. Armstrong
Legal

Subject:

Dealer’s Record of Sale of Revolver or Pistol

295.1243

August 30, 1982

This is in response to your memorandum of August 4, 1982 to Mr. Gary Jugum regarding the imposition, by the Department of Justice, of a new fee for processing Dealer’s Record of Sale of Revolver or Pistol (DROS) forms. Effective July 1, 1982 a $2.25 fee* must be submitted by licensed firearm dealers for each DROS form transmitted to the Department of Justice in accordance with section 12076 of the Penal Code. You wish to know whether or not these fees are includible in the taxable gross receipts of licensed firearm dealers. We have reviewed section 12076 of the Penal Code, as well as the letter dated July 1, 1982 from the Department of Justice to all Licensed Firearm Dealers. The fee imposed by the Department of Justice, in this instance, is directly on the dealer of firearms. There is no requirement in section 12076 that the dealers charge the gun purchaser for trasmitting the DROS form, but a dealer may choose to charge his customer. We are of the opinion that if the $2.25 fee is passed on to the customer, it is properly includible in the gun dealers’ taxable gross receipts. If you have further questions concerning this matter, we will be happy to discuss them with you.

MCA:ba

cc:

Compliance Planning Unit
Mr. G. J. Jugum
Mr. D. J. Hennessy

• On & after 1/1/99, this fee is imposed on purchaser, not
  retailer who passes it on, & thus isn’t part of retailer’s
  taxable gross receipts.
  DHL 6/4/99